CIVILIAN INTELLIGENCE 

COMMUNITY

Additional Actions Needed 

to Improve Reporting on 

and Planning for the Use of 

Contract Personnel

Statement of Timothy J. DiNapoli, Director 

Acquisition and Sourcing Management

Testimony 

Before the Committee on Homeland 

Security and Governmental Affairs, 

U.S. Senate

For Release on Delivery 

Expected at 10:00 a.m. ET

Wednesday, June 18, 2014

GAO-14-692T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-692T, a testimony 

before the Committee on Homeland Security 

and Governmental Affairs, U.S. Senate

June 18, 2014

CIVILIAN INTELLIGENCE COMMUNITY

Additional Actions Needed to Improve Reporting on

and Planning for the Use of Contract Personnel

Why GAO Did This Study

The IC uses core contract personnel to 

augment its workforce. These 

contractors typically work alongside 

government personnel and perform 

staff-like work. Some core contract 

personnel require enhanced oversight 

because they perform services that 

could significantly influence the 

government’s decision making.

In September 2013, GAO issued a 

classified report that addressed (1) the 

extent to which the eight civilian IC 

elements use core contract personnel, 

(2) the functions performed by these 

personnel and the reasons for their 

use, and (3) whether the elements 

developed policies and strategically 

planned for their use. GAO reviewed 

and assessed the reliability of the 

elements’ core contract personnel 

inventory data for fiscal years 2010 

and 2011, including reviewing a 

nongeneralizable sample of 287 

contract records. GAO also reviewed 

agency acquisition policies and 

workforce plans and interviewed 

agency officials. In January 2014, GAO 

issued an unclassified version of the 

September 2013 report, GAO-14-204. 

This statement is based on the 

information in the unclassified GAO 

report.

What GAO Recommends

In the January 2014 report, GAO 

recommended that IC CHCO take 

several actions to improve the 

inventory data’s reliability, revise 

strategic workforce planning guidance, 

and develop ways to identify contracts 

for services that could affect the 

government’s decision-making 

authority. IC CHCO generally agreed 

with GAO’s recommendations.

What GAO Found

Limitations in the intelligence community’s (IC) inventory of contract personnel 

hinder the ability to determine the extent to which the eight civilian IC elements—

the Central Intelligence Agency (CIA), Office of the Director of National 

Intelligence (ODNI), and six components within the Departments of Energy, 

Homeland Security, Justice, State, and the Treasury—use these personnel. The 

IC Chief Human Capital Officer (CHCO) conducts an annual inventory of core 

contract personnel that includes information on the number and costs of these 

personnel. However, GAO identified a number of limitations in the inventory that 

collectively limit the comparability, accuracy, and consistency of the information 

reported by the civilian IC elements as a whole. For example, changes to the 

definition of core contract personnel limit the comparability of the information over 

time. In addition, the civilian IC elements used various methods to calculate the 

number of contract personnel and did not maintain documentation to validate the 

number of personnel reported for 37 percent of the records GAO reviewed. GAO 

also found that the civilian IC elements either under- or over-reported the amount 

of contract obligations by more than 10 percent for approximately one-fifth of the 

records GAO reviewed. Further, IC CHCO did not fully disclose the effects of 

such limitations when reporting contract personnel and cost information to 

Congress, which limits its transparency and usefulness.

The civilian IC elements used core contract personnel to perform a range of 

functions, such as information technology and program management, and 

reported in the core contract personnel inventory on the reasons for using these 

personnel. However, limitations in the information on the number and cost of core 

contract personnel preclude the information on contractor functions from being 

used to determine the number of personnel and their costs associated with each 

function. Further, civilian IC elements reported in the inventory a number of 

reasons for using core contract personnel, such as the need for unique expertise, 

but GAO found that 40 percent of the contract records reviewed did not contain 

evidence to support the reasons reported.

Collectively, CIA, ODNI, and the departments responsible for developing policies 

to address risks related to contractors for the other six civilian IC elements have 

made limited progress in developing those policies, and the civilian IC elements 

have generally not developed strategic workforce plans that address contractor 

use. Only the Departments of Homeland Security and State have issued policies 

that generally address all of the Office of Federal Procurement Policy’s 

requirements related to contracting for services that could affect the 

government’s decision-making authority. In addition, IC CHCO requires the 

elements to conduct strategic workforce planning but does not require the 

elements to determine the appropriate mix of government and contract 

personnel. Further, the inventory does not provide insight into the functions 

performed by contractors, in particular those that could inappropriately influence 

the government’s control over its decisions. Without complete and accurate 

information in the inventory on the extent to which contractors are performing 

specific functions, the elements may be missing an opportunity to leverage the 

inventory as a tool for conducting strategic workforce planning and for prioritizing 

contracts that may require increased management attention and oversight.

View GAO-14-692T. For more information, 

contact Timothy J. DiNapoli at (202) 512-4841 

or dinapolit@gao.gov.
 

Page 1 GAO-14-692T 

Chairman Carper, Ranking Member Coburn, and Members of the 

Committee:

I am pleased to be here today as you examine the use of contractors by 

the civilian intelligence community (IC). Like other federal agencies, the 

eight agencies or departmental offices that make up the civilian IC have 

long relied on contractors to support their missions.1 For the purposes of

this statement, I will refer to these agencies or departmental offices as the 

civilian IC elements. While the use of contractors can provide flexibility to 

meet immediate needs and obtain unique expertise, their use can also 

introduce risks for the government to consider and manage. In that 

regard, the IC has focused considerable attention on identifying and 

managing their use of “core contract personnel,” who provide a range of 

direct technical, managerial, and administrative support functions to the 

IC. As part of its efforts, since fiscal year 2007, the IC Chief Human 

Capital Officer (IC CHCO) annually conducts an inventory of these 

personnel, including information on the number and costs of contractor 

personnel and the services they provide. These contractors typically work 

alongside government personnel, augment the workforce, and perform 

staff-like work. Core contract personnel perform the types of services that 

may also affect an element’s decision-making authority. Without proper 

management and oversight, such services risk inappropriately influencing 

the government’s control over and accountability for decisions that may 

be supported by contractors’ work.

At the request of this committee, in September 2013, we issued a 

classified report that addressed (1) the extent to which the eight civilian IC 

elements rely on core contract personnel, (2) the functions performed by 

core contract personnel and the factors that contribute to their use, and 

(3) whether the civilian IC elements have developed policies and 

guidance and strategically planned for their use of contract personnel to 

mitigate related risks. In January 2014, we issued an unclassified version 

of that report that omits sensitive or classified information, such as the 

 

1

The eight agencies or departmental offices that make up the civilian IC are the Central 

Intelligence Agency (CIA), the Department of Energy’s Office of Intelligence and 

Counterintelligence (DOE IN), Department of Homeland Security’s Office of Intelligence 

and Analysis (DHS I&A), Department of State’s Bureau of Intelligence and Research 

(State INR), Department of the Treasury’s Office of Intelligence and Analysis (Treasury 

OIA), Drug Enforcement Administration’s Office of National Security Intelligence (DEA 

NN), Federal Bureau of Investigation (FBI), and Office of the Director of National 

Intelligence (ODNI).
 

Page 2 GAO-14-692T 

number and associated costs of core contract personnel.2 My statement 

today is based on the information contained in the unclassified report.

To address these three issues, we reviewed and assessed the reliability 

of the eight civilian IC elements’ core contract personnel inventory data 

for fiscal years 2010 and 2011, including reviewing a nongeneralizable 

sample of 287 contract records.3 We originally planned to review fiscal 

years 2007 through 2011 inventory data. However, we could not conduct 

a reliability assessment of the data for fiscal years 2007 through 2009 due 

to a variety of factors. These factors include civilian IC element officials’ 

stating that they could not locate records of certain years’ submissions or 

that obtaining the relevant documentation would require an unreasonable 

amount of time. As a result, we generally focused our review on data from 

fiscal years 2010 and 2011. We also reviewed relevant IC CHCO 

guidance and documents and interviewed agency officials responsible for 

compiling and processing the data. We also reviewed agency acquisition 

policies and guidance, workforce planning documents, and strategic 

planning tools. We also interviewed human capital, procurement, or 

program officials at each civilian IC element. We compared the plans, 

guidance, and tools to Office of Management and Budget (OMB) 

guidance that address risks related to contracting for work closely 

supporting inherently governmental and critical functions, including Office 

of Federal Procurement Policy’s (OFPP) September 2011 Policy Letter 

11-01, Performance of Inherently Governmental and Critical Functions; 

OMB’s July 2009 Memorandum, Managing the Multisector Workforce; 

and OMB’s November 2010 and December 2011 memoranda on service 

contract inventories. Further, we compared the civilian IC elements’ 

efforts to strategic human capital best practices identified in our prior 

work.4

 

2

GAO, Civilian Intelligence Community: Additional Actions Needed to Improve Reporting 

on and Planning for the Use of Contract Personnel, GAO-14-204 (Washington, D.C.: Jan. 

29, 2014).

3

Our sample was not generalizable as certain contract records were removed due to 

sensitivity concerns. The number of contract records we reviewed was a random sample 

of the contracts across all eight civilian IC elements and therefore cannot be used to 

determine the number of contracts for any individual civilian IC element or the civilian IC 

elements as a whole.

4

GAO, Human Capital: A Model of Strategic Human Capital Management, GAO-02-373SP 

(Washington, D.C.: Mar. 15, 2002).
 

Page 3 GAO-14-692T 

The work this statement is based on was performed in accordance with 

generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objective. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on 

our audit objective. Our unclassified report provides further details on our 

scope and methodology.

Limitations in the core contract personnel inventory hinder the ability to 

determine the extent to which the eight civilian IC elements used these 

personnel in 2010 and 2011 and to identify how this usage has changed 

over time. IC CHCO uses the inventory information in its statutorilymandated annual personnel assessment to compare the current and 

projected number and costs of core contract personnel to the number and 

costs during the prior 5 years.5 IC CHCO reported that the number of core 

contract personnel full-time equivalents (FTEs) and their associated costs 

declined by nearly one-third from fiscal year 2009 to fiscal year 2011. 

However, we found a number of limitations with the inventory, including 

changes to the definition of core contract personnel, the elements’ use of 

inconsistent methodologies and a lack of documentation for calculating 

FTEs, and errors in reporting contract costs. On an individual basis, some 

of the limitations we identified may not raise significant concerns. When 

taken together, however, they undermine the utility of the information for 

determining and reporting on the extent to which the civilian IC elements 

use core contract personnel. Additionally, IC CHCO did not clearly explain 

the effect of the limitations when reporting the information to Congress.

We identified several issues that limit the comparability, accuracy, and 

consistency of the information reported by the civilian IC elements as a 

whole including:

• Changes to the definition of core contract personnel. To address 

concerns that IC elements were interpreting the definition of core 

contract personnel differently and to improve the consistency of the 

information in the inventory, IC CHCO worked with the elements to 

develop a standard definition that was formalized with the issuance of 

 

5

50 U.S.C. § 3098.

Limitations in the 

Inventory Undermine 

Ability to Determine 

Extent of Civilian IC 

Elements’ Reliance 

on Contractors
 

Page 4 GAO-14-692T 

Intelligence Community Directive (ICD) 612 in October 2009. Further, 

IC CHCO formed the IC Core Contract Personnel Inventory Control 

Board, which has representatives from all of the IC elements, to 

provide a forum to resolve differences in the interpretation of IC 

CHCO’s guidance for the inventory. As a result of the board’s efforts, 

IC CHCO provided supplemental guidance in fiscal year 2010 to 

either include or exclude certain contract personnel, such as those 

performing administrative support, training support, and information 

technology services. While these changes were made to—and could 

improve—the inventory data, it is unclear the extent to which the 

definitional changes contributed to the reported decrease in the 

number of core contract personnel and their associated costs from 

year to year. For example, for fiscal year 2010, officials from one 

civilian IC element told us they stopped reporting information 

technology help desk contractors, which had been previously 

reported, to be consistent with IC CHCO’s revised definition. One of 

these officials stated consequently that the element’s reported 

reduction in core contract personnel between fiscal years 2009 and 

2010 did not reflect an actual change in their use of core contract 

personnel, but rather a change in how core contract personnel were 

defined for the purposes of reporting to IC CHCO. However, IC CHCO 

included this civilian IC element’s data when calculating the IC’s 

overall reduction in number of core contract personnel between fiscal 

years 2009 and 2011 in its briefing to Congress and the personnel 

level assessment. IC CHCO explained in both documents that this 

civilian IC element’s rebaselining had an effect on the element’s 

reported number of contractor personnel for fiscal year 2010 but did 

not explain how this would limit the comparability of the number and 

costs of core contract personnel for both this civilian IC element and 

the IC as a whole.

• Inconsistent methodologies for determining FTEs. The eight 

civilian IC elements used significantly different methodologies when 

determining the number of FTEs. For example, some civilian IC 

elements estimated contract personnel FTEs using target labor hours 

while other civilian IC elements calculated the number of FTEs using 

the labor hours invoiced by the contractor. As a result, the reported 

numbers were not comparable across these elements. The IC CHCO 

core contract personnel inventory guidance for both fiscal years 2010 

and 2011 did not specify appropriate methodologies for calculating 

FTEs, require IC elements to describe their methodologies, or require 

IC elements to disclose any associated limitations with their 

methodologies. Depending on the methodology used, an element 

could calculate a different number of FTEs for the same contract. For 
 

Page 5 GAO-14-692T 

example, for one contract we reviewed at a civilian IC element that 

reports FTEs based on actual labor hours invoiced by the contractor, 

the element reported 16 FTEs for the contract. For the same contract, 

however, a civilian IC element that uses estimated labor hours at the 

time of award would have calculated 27 FTEs. IC CHCO officials 

stated they had discussed standardizing the methodology for 

calculating the number of FTEs with the IC elements but identified 

challenges, such as identifying a standard labor-hour conversion 

factor for one FTE. IC CHCO guidance for fiscal year 2012 instructed 

elements to provide the total number of direct labor hours worked by 

the contract personnel to calculate the number of FTEs for each 

contract, as opposed to allowing for estimates, which could improve 

the consistency of the FTE information reported across the IC.

• Lack of documentation for calculating FTEs. Most of the civilian IC 

elements did not maintain readily available documentation of the 

information used to calculate the number of FTEs reported for a 

significant number of the records we reviewed. As a result, these 

elements could not easily replicate the process for calculating or 

validate the reliability of the information reported for these records. 

Federal internal control standards call for appropriate documentation 

to help ensure the reliability of the information reported.6 For 37 

percent of the 287 records we reviewed, however, we could not 

determine the reliability of the information reported.

• Inaccurately determined contract costs. We could not reliably 

determine the costs associated with core contract personnel, in part 

because our analysis identified numerous discrepancies between the 

amount of obligations reported by the civilian IC elements in the 

inventory and these elements’ supporting documentation for the 

records we reviewed. For example, we found that the civilian IC 

elements either under- or over-reported the amount of contract 

obligations by more than 10 percent for approximately one-fifth of the 

287 records we reviewed. Further, the IC elements could not provide 

complete documentation to validate the amount of reported 

obligations for another 17 percent of the records we reviewed. Civilian 

IC elements cited a number of factors that may account for the 

discrepancies, including the need to manually enter obligations for 

 

6

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
 

Page 6 GAO-14-692T 

certain contracts or manually delete duplicate contracts. Officials from 

one civilian IC element noted that a new contract management 

system was used for reporting obligations in the fiscal year 2011 

inventory, which offered greater detail and improved functionality for 

identifying obligations on their contracts; however, we still identified 

discrepancies in 18 percent of this element’s reported obligations in 

fiscal year 2011 for the records in our sample.

In our January 2014 report, we recommended that IC CHCO clearly 

specify limitations, significant methodological changes, and their 

associated effects when reporting on the IC’s use of core contract 

personnel. We also recommended that IC CHCO develop a plan to 

enhance internal controls for compiling the core contract personnel 

inventory. IC CHCO agreed with these recommendations and described 

steps it was taking to address them. Specifically, IC CHCO stated it will 

highlight all adjustments to the data over time and the implications of 

those adjustments in future briefings to Congress and OMB. In addition, 

IC CHCO stated it has added requirements for the IC elements to include 

the methodologies used to identify and determine the number of core 

contract personnel and their steps for ensuring the accuracy and 

completeness of the data.

The civilian IC elements have used core contract personnel to perform a 

range of functions, including human capital, information technology, 

program management, administration, collection and operations, and 

security services, among others. However, the aforementioned limitations 

we identified in the obligation and FTE data precluded us from using the 

information on contractor functions to determine the number of personnel 

and their costs associated with each function category. Further, the 

civilian IC elements could not provide documentation for 40 percent of the 

contracts we reviewed to support the reasons they cited for using core 

contract personnel.

As part of the core contract personnel inventory, IC CHCO collects 

information from the elements on contractor-performed functions using 

the primary contractor occupation and competency expertise data field. 

An IC CHCO official explained that this data field should reflect the tasks 

performed by the contract personnel. IC CHCO’s guidance for this data 

field instructs the IC elements to select one option from a list of over 20 

broad categories of functions for each contract entry in the inventory. 

Based on our review of relevant contract documents, such as statements 

of work, we were able to verify the categories of functions performed for 

Inventory Provides 

Limited Insight into 

Functions Performed 

by Contractors and 

Reasons for Their 

Use
 

Page 7 GAO-14-692T 

almost all of the contracts we reviewed, but we could not determine the 

extent to which civilian IC elements contracted for these functions. For 

example, we were able to verify for one civilian IC element’s contract that 

contract personnel performed functions within the systems engineering 

category, but we could not determine the number of personnel dedicated 

to that function because of unreliable obligation and FTE data.

Further, the IC elements often lacked documentation to support why they 

used core contract personnel. In preparing their inventory submissions, IC 

elements can select one of eight options for why they needed to use 

contract personnel, including the need to provide surge support for a 

particular IC mission area, insufficient staffing resources, or to provide 

unique technical, professional, managerial, or intellectual expertise to the 

IC element that is not otherwise available from U.S. governmental civilian 

or military personnel. However, for 81 of the 102 records in our sample 

coded as unique expertise, we did not find evidence in the statements of 

work or other contract documents that the functions performed by the 

contractors required expertise not otherwise available from U.S. 

government civilian or military personnel. For example, contracts from 

one civilian IC element coded as unique expertise included services for 

conducting workshops and analysis, producing financial statements, and 

providing program management. Overall, the civilian IC elements could 

not provide documentation for 40 percent of the 287 records we reviewed. 

As previously noted, in our January 2014 report, we recommended that 

IC CHCO develop a plan to enhance internal controls for compiling the 

core contract personnel inventory.

CIA, ODNI, and the executive departments that are responsible for 

developing policies to address risks related to contractors for the six 

civilian IC elements within those departments have generally made 

limited progress in developing such policies. Further, the eight civilian IC 

elements have generally not developed strategic workforce plans that 

address contractor use and may be missing opportunities to leverage the 

inventory as a tool for conducting strategic workforce planning and for 

prioritizing contracts that may require increased management attention 

and oversight.

By way of background, federal acquisition regulations provide that as a 

matter of policy certain functions government agencies perform, such as 

Limited Progress Has 

Been Made in 

Developing Policies 

and Strategies on 

Contractor Use to 

Mitigate Risks
 

Page 8 GAO-14-692T 

determining agency policy, are inherently governmental and must be 

performed by federal employees.7 In some cases, contractors perform 

functions closely associated with the performance of inherently 

governmental functions.8 For example, contractors performing certain 

intelligence analysis activities may closely support inherently 

governmental functions. For more than 20 years, OMB procurement 

policy has indicated that agencies should provide a greater degree of 

scrutiny when contracting for services that closely support inherently 

governmental functions.9 The policy directs agencies to ensure that they 

maintain sufficient government expertise to manage the contracted work. 

The Federal Acquisition Regulation also addresses the importance of 

management oversight associated with contractors providing services 

that have the potential to influence the authority, accountability, and 

responsibilities of government employees.10

Our prior work has examined reliance on contractors and the mitigation of 

related risks at the Department of Defense, Department of Homeland 

Security, and several other civilian agencies and found that they generally 

 

7

See generally Federal Acquisition Regulation (FAR) § 2.101 for the definition of 

inherently governmental functions and FAR § 7.503(c) which includes a list of functions 

that are considered to be inherently governmental.

8

Functions closely associated with the performance of inherently governmental functions 

are not considered inherently governmental, but may approach being in that category 

because of the nature of the function, the manner in which the contractor performs the 

contract, or the manner in which the government administers contractor performance. 

FAR § 7.503(d).

9

Office of Federal Procurement Policy (OFPP) Policy Letter 92-1, Inherently 

Governmental Functions (Sept. 23, 1992 [Rescinded]); OFPP Policy Letter 93-1, 

Management Oversight of Service Contracting (May 18, 1994).

10See generally FAR § 37.114, which requires agencies to provide special management 

attention to contracts for services that require the contractor to provide advice, opinions, 

recommendations, ideas, reports, analyses, or other work products, as they have the 

potential for influencing the authority, accountability, and responsibilities of government 

officials.
 

Page 9 GAO-14-692T 

did not fully consider and mitigate risks of acquiring services that may 

inform government decisions.11

Within the IC, core contract personnel perform the types of functions that 

may affect an IC element’s decision-making authority or control of its 

mission and operations. While core contract personnel may perform 

functions that closely support inherently governmental work, these 

personnel are generally prohibited from performing inherently 

governmental functions. Figure 1 illustrates how the risk of contractors 

influencing government decision making is increased as core contract 

personnel perform functions that closely support inherently governmental 

functions.

 

11GAO, Managing Service Contracts: Recent Efforts to Address Associated Risks Can Be 

Further Enhanced, GAO-12-87 (Washington, D.C.: Dec. 7, 2011); Contingency 

Contracting: Improvements Needed in Management of Contractors Supporting Contract 

and Grant Administration in Iraq and Afghanistan, GAO-10-357 (Washington, D.C.: Apr. 

12, 2010); Defense Acquisitions: Further Actions Needed to Address Weaknesses in 

DOD’s Management of Professional and Management Support Contracts, GAO-10-39 

(Washington, D.C.: Nov. 20, 2009); and Department of Homeland Security: Improved 

Assessment and Oversight Needed to Manage Risk of Contracting for Selected Services, 

GAO-07-990 (Washington, D.C.: Sept. 17, 2007).
 

Page 10 GAO-14-692T 

Figure 1: Risk Associated with the Use of Core Contract Personnel

More recently, OFPP’s September 2011 Policy Letter 11-01 builds on 

past federal policies by including a detailed checklist of responsibilities 

that must be carried out when agencies rely on contractors to perform 

services that closely support inherently governmental functions. The 

policy letter requires executive branch departments and agencies to 

develop and maintain internal procedures to address the requirements of 

the guidance. OFPP, however, did not establish a deadline for when 

agencies need to complete these procedures. In 2011, when we reviewed 

civilian agencies’ efforts in managing service contracts, we concluded that 

a deadline may help better focus agency efforts to address risks and 

therefore recommended that OFPP establish a near-term deadline for 

agencies to develop internal procedures, including for services that 

closely support inherently governmental functions. OFPP generally 

concurred with our recommendation and commented that it would likely 
 

Page 11 GAO-14-692T 

establish time frames for agencies to develop the required internal 

procedures, but it has not yet done so.12

In our January 2014 report, we found that CIA, ODNI, and the 

departments of the other civilian IC elements had not fully developed 

policies that address risks associated with contractors closely supporting 

inherently governmental functions. DHS and State had issued policies 

and guidance that addressed generally all of OFPP Policy Letter 11-01’s 

requirements related to contracting for services that closely support 

inherently governmental functions. However, the Departments of Justice, 

Energy, and Treasury; CIA; and ODNI were in various stages of 

developing required internal policies to address the policy letter. Civilian 

IC element and department officials cited various reasons for not yet 

developing policies to address all of the OFPP policy letter’s 

requirements. For example, Treasury officials stated that the OFPP policy 

letter called for dramatic changes in agency procedures and thus elected 

to conduct a number of pilots before making policy changes.

We also found that decisions to use contractors were not guided by 

strategies on the appropriate mix of government and contract personnel. 

OMB’s July 2009 memorandum on managing the multisector workforce 

and our prior work on best practices in strategic human capital 

management have indicated that agencies’ strategic workforce plans 

should address the extent to which it is appropriate to use contractors.13

Specifically, agencies should identify the appropriate mix of government 

and contract personnel on a function-by-function basis, especially for 

critical functions, which are functions that are necessary to the agency to 

effectively perform and maintain control of its mission and operations. The 

OMB guidance requires an agency to have sufficient internal capability to 

control its mission and operations when contracting for these critical 

functions. While IC CHCO requires IC elements to conduct strategic 

workforce planning, it does not require the elements to determine the 

appropriate mix of personnel either generally or on a function-by-function 

basis. ICD 612 directs IC elements to determine, review, and evaluate the 

number and uses of core contract personnel when conducting strategic 

workforce planning but does not reference the requirements related to 

 

12GAO-12-87. 

13GAO-02-373SP; and GAO, Human Capital: A Self-Assessment Checklist for Agency 

Leaders, GAO/OCG-00-14G (Washington, D.C.: September 2000).
 

Page 12 GAO-14-692T 

determining the appropriate workforce mix specified in OMB’s July 2009 

memorandum or require elements to document the extent to which 

contractors should be used. As we reported in January 2014, the civilian 

IC elements’ strategic workforce plans generally did not address the 

extent to which it is appropriate to use contractors, either in general or 

more specifically to perform critical functions. For example, ODNI’s 2012-

2017 strategic human capital plan outlines the current mix of government 

and contract personnel by five broad function types: core mission, 

enablers, leadership, oversight, and other. The plan, however, does not 

elaborate on what the appropriate mix of government and contract 

personnel should be on a function-by-function basis. In August 2013, 

ODNI officials informed us they are continuing to develop documentation 

to address a workforce plan.

Lastly, the civilian IC elements’ ability to use the inventory for strategic 

planning is hindered by limited information on contractor functions. 

OFPP’s November 2010 memorandum on service contract inventories 

indicates that a service contract inventory is a tool that can assist an 

agency in conducting strategic workforce planning. Specifically, an 

agency can gain insight into the extent to which contractors are being 

used to perform specific services by analyzing how contracted resources, 

such as contract obligations and FTEs, are distributed by function across 

an agency. The memorandum further indicates that this insight is 

especially important for contracts whose performance may involve critical 

functions or functions closely associated with inherently governmental 

functions. When we met with OFPP officials during the course of our 

work, they stated that the IC’s core contract personnel inventory serves 

this purpose for the IC and, to some extent, follows the intent of the 

service contract inventories guidance to help mitigate risks. OFPP 

officials stated that IC elements are not required to submit separate 

service contract inventories that are required of the civilian agencies and 

DOD, in part because of the classified nature of some of the contracts. 

The core contract personnel inventory, however, does not provide the 

civilian IC elements with detailed insight into the functions their 

contractors are performing or the extent to which contractors are used to 

perform functions that are either critical to support their missions or 

closely support inherently governmental work. For example, based on the 

contract documents we reviewed, we identified at least 128 instances in 

the 287 records we reviewed in which the functions reported in the 

inventory data did not reflect the full range of services listed in the 

contracts. In our January 2014 report, we concluded that without 

complete and accurate information in the core contract personnel 

inventory on the extent to which contractors are performing specific 
 

Page 13 GAO-14-692T 

functions, the civilian IC elements may be missing an opportunity to 

leverage the inventory as a tool for conducting strategic workforce 

planning and for prioritizing contracts that may require increased 

management attention and oversight.

In our January 2014 report, we recommended that the Departments of 

Justice, Energy, and Treasury; CIA; and ODNI set time frames for 

developing guidance that would fully address OFPP Policy Letter 11-01’s 

requirements related to closely supporting inherently governmental 

functions. The agencies are in various stages of responding to our 

recommendation. For example, Treasury indicated plans to issue 

guidance by the end of fiscal year 2014. DOJ agreed with our 

recommendation, and we will continue to follow up with them on their 

planned actions. CIA, DOE, and ODNI have not commented on our 

recommendation, and we will continue to follow up with them to identify 

what actions, if any, they are taking to address our recommendation. To 

improve the ability of the civilian IC elements to strategically plan for their 

contractors and mitigate associated risks, we also recommended that IC 

CHCO revise ICD 612 to require IC elements to identify their assessment 

of the appropriate workforce mix on a function-by-function basis, assess 

how the core contract personnel inventory could be modified to provide 

better insights into the functions performed by contractors, and require 

the IC elements to identify contracts within the inventory that include 

services that are critical or closely support inherently governmental 

functions. IC CHCO generally agreed with these recommendations and 

indicated it would explore ways to address the recommendations.

In conclusion, IC CHCO and the civilian IC elements recognize that they 

rely on contractors to perform functions essential to meeting their 

missions. To effectively leverage the skills and capabilities that 

contractors provide while managing the government’s risk, however, 

requires agencies to have the policies, tools, and data in place to make 

informed decisions. OMB and OFPP guidance issued over the past 

several years provide a framework to help assure that agencies 

appropriately identify, manage and oversee contractors supporting 

inherently governmental functions, but we found that CIA, ODNI, and 

several of the departments in our review still need to develop guidance to 

fully implement them. Similarly, the core contract personnel inventory can 

be one of those tools that help inform strategic workforce decisions, but at 

this point the inventory has a number of data limitations that undermines 

its utility. IC CHCO has recognized these limitations and, in conjunction 

with the IC elements, has already taken some actions to improve the 

inventory’s reliability and has committed to doing more. Collectively, 
 

Page 14 GAO-14-692T 

incorporating needed changes into agency guidance and improving the 

inventory’s data and utility, as we recommended, should better position 

the IC CHCO and the civilian IC elements to make more informed 

decisions.

Chairman Carper, Ranking Member Coburn, and Members of the 

Committee, this concludes my prepared remarks. I would be happy to 

answer any questions that you may have.

For questions about this statement, please contact Timothy DiNapoli at 

(202) 512-4841, or at dinapolit@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Individuals making key contributions to this testimony 

include Molly W. Traci, Assistant Director; Claire Li; and Kenneth E. 

Patton.

GAO Contact and 

Staff 

Acknowledgments

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